General Court: statements in earnings calls can trigger competition investigations

On 9 July 2025, the General Court ruled on Michelin's appeal against a European Commission decision ordering an inspection as part of an investigation into alleged price coordination by tyre manufacturers (the Inspection Decision). The European Commission had largely relied on statements made by key management individuals during so-called "earnings calls" to justify its decision to carry out inspections at the premises of the tyre manufacturers.

What you need to know

• The General Court confirmed that statements made during earnings calls could form "sufficiently serious indicia" of a potential violation of competition law to justify a decision to carry out an inspection.

• The General Court partially annulled the Inspection Decision insofar as it related to a period for which the European Commission did not possess sufficient evidence to justify an inspection, thus showing a willingness to review carefully whether inspection decisions are based on sufficiently convincing evidence.

• Managers should take a cautious approach when making public statements about the company's future commercial conduct: statements made during earnings calls may be subject to scrutiny by competition regulators. 

On 10 January 2024, the European Commission announced that it had undertaken inspections at the premises of several tyre manufacturers. The European Commission explained that it suspected the tyre manufacturers had used public announcements made during earnings calls to signal their future intention in relation to the pricing of their products. Michelin challenged the European Commission's Inspection Decision on two grounds. 

First, Michelin argued that the Inspection Decision was arbitrary considering the methodology adopted by the European Commission to "pick" the tyre sector as a sector for investigation. The European Commission decided to investigate the tyre sector based on a data science methodology, notably by conducting a "bigrams" (pairs of consecutive words) analysis across countless earnings call transcripts and specifically focusing on two-word phrases seen as indicative of a potential intention to share pricing intentions or other forward-looking strategies. The European Commission claimed that the tyre sector stood out following this review as a sector in which the earnings calls contained suspicious bigrams more frequently. Michelin argued that choosing to investigate the tyre sector on the basis of this "quantitative evidence" was arbitrary as there was no indication that a similar concentration of suspicious bigrams did not exist in other sectors. 

Second, the statements made by the Michelin managers were responses to questions by financial analysts in the context of the earnings calls. The statements could therefore not have been "planned" or part of a plan to collude. In addition, Michelin stressed that its managers are under a duty to inform the market (as Michelin is a listed company) and could not avoid answering certain questions. 

The General Court found that the Inspection Decision should largely be upheld. 

In relation to Michelin's argument that the European Commission's methodology was arbitrary, the General Court considered the European Commission's quantitative methodology to be sensible and found that the European Commission did not choose to inspect the tyre manufacturers on the basis of the quantitative evidence only. On the contrary, the analysis based on bigrams and quantitative elements was refined based on qualitative elements through a detailed analysis of the content of the earnings calls in the tyre sector which focused on the context and content of the identified statements to determine whether they plausibly indicated collusive intent. The General Court therefore concluded that the European Commission's approach did not appear to be arbitrary.

In relation to Michelin's argument that the statements could not have been planned as they were given in response to questions, the General Court found that the fact that the controversial statements were made when answering questions from financial analysts was not sufficient to consider the statements a priori irrelevant to decide whether they constituted evidence of potential collusion which would justify a dawn raid. 

The General Court noted that Michelin's alternative explanations for why the managers might have made the statements were not relevant when reviewing the legality of a decision to subject a company to an inspection. For an inspection to be legal, it is sufficient that the evidence available to the European Commission provides plausible evidence that collusion may have taken place. The existence of alternative plausible explanations does not deprive the European Commission of the right to investigate a company: these arguments only become relevant if the European Commission decides to sanction the companies concerned. 

The General Court, however, partially annulled the Inspection Decision as it referred to a period for which the European Commission did not have sufficiently serious indicia that anticompetitive conduct may have taken place. This confirms that the General Court is ready to vet carefully if the European Commission has sufficiently convincing evidence to justify a decision to carry out an inspection.

Overall, the judgment is a victory for the European Commission as it validates its right to carry out inspections on the basis of a combination of evidence which includes both data science-based elements and evidence verified using more traditional investigative tools (notably the manual review of the documents selected using data science). This will be welcomed by the European Commission given it has indicated that it is currently investing in the use of data science tools to detect cartels. However, the General Court judgment only validates the decision to raid a company based on this type of evidence. It remains to be seen whether the European courts will validate a decision to impose fines on a company on the basis of evidence gathered using data science tools. 

There are several key takeaways from the General Court proceedings: 

• First, managers should be careful when publicly commenting on the company's future commercial conduct. The General Court has clearly established that public statements by a company's management about its future commercial conduct may trigger significant antitrust risks in certain circumstances. This is an important reminder for management of companies which regularly engage with the financial community when presenting their financial results. This will create an additional burden on a company's management (particularly for listed companies) as they report to their shareholders and need to provide them with sufficient information to assess their investment. 

• Second, companies should be prepared for more ex officio investigations. During the proceedings, it emerged that the European Commission had reviewed tens of thousands of earnings calls before concluding that the tyre manufacturers' statements were atypical and suspicious. This is a reminder that the European Commission is using digital tools to try to identify anticompetitive conduct which may lead to more investigations being justified on the basis of evidence which is more limited than a full leniency application or the testimony of a whistleblower. While this may lead to further litigation in future, the General Court has (unsurprisingly) concluded that the European Commission has the right to conduct an investigation on the basis of evidence which plausibly suggests that the companies concerned may have colluded, without being required to provide evidence that an infringement has in fact taken place. 

• Third, the judgment only relates to the legality of the European Commission's decision to conduct an inspection at Michelin's premises. To justify this decision, it was sufficient for the European Commission to demonstrate that the evidence it had gathered from statements made by senior management during earnings calls constituted sufficiently serious indicia of a potential infringement. Further guidance on what can (and cannot) be said during earnings calls may be available once the European Commission has concluded its investigation. 

For companies active in closely scrutinised industries (i.e., where pricing announcement often occur in step with other), this ruling highlights the importance of careful oversight of public statements. Senior management, CFOs, business unit leaders and investor relations teams should take a more measured approach when discussing forward-looking strategic steps, particularly pricing forecasts. 

In the proceedings before the General Court it emerged that the European Commission had highlighted the suspicious nature of announcements of intentions and strategies regarding future pricing (including statements such as, "we want to send a signal", "we have a plan to", "the strategy is to focus on", "we strive to stick to", "we will do our best to", "we are able to", "not our intention to go for"). Companies may therefore want to take a cautious approach to using these types of statements. 

Maria Jaspers (who is in charge of cartel enforcement at the European Commission) recently explained that the European Commission considers acting when companies repeatedly stress in public that "there is a need for capacity discipline in the industry", "now is not a moment to enter into a price war" or "we certainly have the intention to follow the market leader on prices". 

In practice, companies should consider adopting or updating compliance policies specifically addressing public statements, ensuring that all relevant staff understand how nuanced remarks might be interpreted by regulators.